South Korean banks are stepping up so-called “embedded finance”, which integrates financial services into other companies’ applications and various platforms. They are working with companies that attract younger consumers and partnering with consumer-facing retailers. The aim is to expand everyday financial services that bundle payments and savings and benefits through various collaborations.

As of Jan. 27, the financial sector says major banks are stepping up strategies to weave financial services naturally into daily life through partnerships with various companies. They aim to broaden customer touchpoints by embedding finance into the consumption process rather than offering it as a separate service.

Embedded finance centres on integrating financial services into specific platforms or commerce environments so customers can use them naturally without launching a separate financial app. As consumption, payments and asset management link into a single flow, the strategy is to make finance part of everyday life rather than a service people seek only when needed.

Recently, K Bank joined hands with fashion platform Musinsa, one of the so-called “Ol-da-mu” group that includes Olive Young, Daiso and Musinsa, which draw heavy interest from younger consumers. K Bank plans to roll out an everyday finance service combining finance and commerce with Musinsa within the third quarter of this year. On Jan. 23, it was designated an innovative financial service by the Financial Services Commission, accelerating the business push.

The two companies have continued developing specific services since signing a business agreement in August last year for “lifestyle commerce-based financial innovation”. A dedicated debit card and payment-benefit services for Musinsa members are to be launched. The structure is expected to go beyond simply offering interest rates like existing affiliated accounts, providing tailored financial benefits that reflect usage patterns and spending preferences.

Users of Musinsa Money will be able to link prepaid top-up balances with a K Bank partner account for real-time top-ups and balance checks, and receive additional rewards depending on specific periods or number of uses. K Bank’s strategy is to build a differentiated customer experience by combining its mobile financial platform capabilities with commerce experience.

Shinhan Bank is also rapidly expanding collaborations with major retailers. It built partnerships in September last year with 11st and in November with CJ Olive Young to launch tailored financial products and services. As a result, it appears that interest-preferential parking accounts and reward products using dedicated accounts and linked debit cards will be launched in the first quarter of this year for 11st and Olive Young members.

Shinhan Bank plans to widen everyday finance touchpoints by expanding from payment benefits at online and offline stores to digital marketing cooperation. Shinhan Bank has already continued collaborations, including offering benefits to customers who pay with Shinhan SOL Pay at Daiso last year, and is continuing retail-based embedded finance experiments.

KB Kookmin Bank is also pursuing an aggressive partnership strategy. In collaboration with GS Retail, which operates GS25 convenience stores, it is providing a card-based simple payment service within the GS Pay app, and is also discussing launching a KB-GS Pay account. The KB Byeolbyeol account launched in partnership with Starbucks sold out with 200,000 accounts, demonstrating the market potential of embedded finance. The move aligns with the “expansion to customers and new markets” strategy presented by President Lee Hwan-ju (이환주).

KakaoBank has built the broadest partnership network. Through its “With” series, including the 26-week savings plan and monthly savings plan, it has continued collaboration with various retail partners. It has expanded widely to include Market Kurly, Happy Point, Kyochon Chicken and Twosome Place. More recently, it has also partnered with Ottogi Mall to introduce content-based financial benefits.

Banks’ focus on embedded finance stems from structural changes in customer touchpoints. As consumption activity shifts to platform-centred channels, traditional banking apps are increasingly being pushed aside as spaces people visit only when needed. Concern is growing that without pulling financial services into lifestyle platforms, the very link to customers could weaken.

A financial sector official said, “Embedded finance is a structure that goes beyond simple affiliated products and naturally seeps finance into customers’ consumption flows.” The official added, “Banks that secure platforms are more likely to secure both competitiveness and customer loyalty, so such partnership cases will continue to increase.”